Opinions on the government's economic plan

Proceso, No.649, 15 February 1995

Taking into account the nation's socio-political and economic
context, the University Public Opinion Institute (IUDOP) of the
Central American University (UCA) conducted a public opinion survey
on the nation's political situation and, specifically, on the
economic measures recently announced by the government. The survey
was conducted between January 28 and February 5, with a valid
sampling of 1,228 adults, both urban and rural, throughout the
nation's 14 departments, using face-to-face household visits. The
sampling was distributed proportionally by department, social
class, and age and gender groups, with a possible sampling error of
+/-4%. In this article, we will only address the opinions expressed
on the government's proposed economic plan.

As a starting-point, the survey revealed that 58% of
Salvadorans knew of the plan proposed by President Calderon Sol.
The figures show that the proportion of people who had heard of the
plan was higher as income levels increased. When those who knew of
the plan were asked whether or not they agreed with it, 61.1% said
they disagreed, while 19.5% agreed, and 19.4% expressed no opinion.

Along those same lines, 34.2% of those who said they disagreed
with the proposed plan said it was because it would harm the
standard of living of the poorest; 29% said it would increase the
cost of living, and 12.4% said it would not solve the nation's
economic problems. Furthermore, 51.1% of those who said they agreed
with the plan said it would benefit the country, and 12.4% said
something must be tried.

Those who said they had heard of the plan were asked, "Whom do
you think the plan will benefit?" Most of the respondents said that
only the richest would benefit (60.8%), while the rest said either
that all would benefit (15.3%), or only the ruling party (14%). A
breakdown by social class shows that the lowest-income population
are more inclined to believe that the measures will only benefit
the rich.

The survey also showed that most Salvadorans do not believe
that the new measures will do anything to improve the nation's
economy. One out of three of those surveyed believe that El
Salvador's economy will not improve from the measures, and another
one-third believe the improvements will be slight. Again, those who
were most skeptical about the possible benefits of the plan for the
Salvadoran economy were the workers, rural residents and urban
marginalized population.

One of the measures initially announced by the government was
an increase in the Value-Added Tax (VAT) from 10% to 12%. Although
that measure was subsequently abandoned, IUDOP had included a
couple of questions about the VAT in its survey. The results show
that increasing the VAT would have been a highly unpopular measure.
Around eight out of every ten Salvadorans (78%) are against
increasing the VAT, even if it were used to finance social spending
such as health, education or the peace process; only 15% thought it
was a good idea to increase the VAT in order to finance more social
spending. Those who opposed a VAT increase believe that the
government ought to do a better job collecting existing taxes,
should find other ways of financing, leave the VAT as it is, or use
another kind of tax. There are two main currents of opinion behind
these evaluations: in the first place, there is the conviction that
an increase in the VAT will not necessarily translate into better
social services; in the second place, most feel that increasing the
VAT will seriously harm the people's already precarious standard of
living.

With regard to privatizing State-owned enterprises, the IUDOP
survey showed that one-third of those questioned (32.4%) believe
that such a measure will particularly benefit the government;
another one-third (31.2%) said that national businesses will profit
the most from such a move. Only 14% feel that privatization will
benefit everyone, and 8.6% think that international companies will
profit. Only 3% of those surveyed feel that the employees of the
institutions in question will benefit from the "modernization" and
sale of State-owned businesses.

In an effort to obtain Salvadorans' opinions on the possible
impact of the proposed economic measures on different aspects of
national life, the survey included the following question: "In your
opinion, will the implementation of President Calderon's economic
plan will have a 1) very good, 2) good, 3) fair, 4) poor or 5) very
poor effect on 1) national industry, 2) democracy, 3) agricultural
production, and 4) employment and work in general. The results, as
seen in the following table, show that the people see industry as
the sector which will reap the most benefits from the proposed
economic policies. It is also interesting to see that agricultural
production and jobs are seen as the great losers under the proposed
plan; we must recall that these categories are most closely related
to the activities which most concern low-income sectors.

The impact of the proposed economic measures
on different areas of economic life (%)

Impact on:

Good

Fair

Poor

N/A

Industry

42.8

28.0

17.7

11.4

Agricultural production

24.7

25.4

39.1

10.7

Employment

26.9

23.4

39.3

10.4

Democracy

22.5

30.0

32.0

15.5

The government has accompanied the announcement of its
economic measures with the warning that all citizens must make
sacrifices in order for El Salvador to "take off" economically and
realize its full potential. IUDOP took that idea and asked all
Salvadorans to define themselves with that in mind. Almost half
(48.7%) defined themselves as "people who are having a hard time
and cannot make any more sacrifices for the nation"; another 41.8%
defined themselves as "people who are having a hard time but can
sacrifice themselves a little more for the nation." The other 9.4%
said they could "make sacrifices for the nation without any
trouble" or "have no problems at all." A breakdown by social class
shows that the poorest are the ones who say they cannot make any
more sacrifices; the upscale urban sectors are the ones more
willing to "make sacrifices" for the nation.

In general terms, the IUDOP survey shows predictable, coherent
opinions by Salvadorans about the government's proposed economic
measures. Contrary to the aura of acceptance the government is
trying to portray around its proposal, the majority of Salvadorans
who have heard of the plan are skeptical about it, and concerned
about the possibility that economic conditions will worsen, both
for the nation as well as for the people in particular. It is clear
that the majority of Salvadorans, especially those who are hardest-
hit by poverty, do not approve of Calderon Sol's plan and are
convinced that it will enrich even further only a handful of
Salvadorans, while impoverishing even further the majority of
dispossessed.

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